Code of Corporate Governance for Public Companies in Nigeria

The Nigerian Securities & Exchange Commission (SEC) released an update of its 2003 Code of Corporate Governance in 2011. It covers, among other things, issues relating to the board, such as composition and remuneration; relationship with shareholders and other stakeholders; and risk management. The Code applies to all listed companies on the Nigerian Stock Exchange and is intended to be the minimum standard of expected corporate governance.

As yet, the Code of Corporate Governance does not address sustainability, apart from requiring the board to ensure that the company operates according to the “highest ethical standards and on an environmentally sustainable basis”. A steering committee has been tasked with developing a new Code of Corporate Governance.

Corporate Governance Rating System

The Corporate Governance Rating System (CGRS) was launched by the Convention on Business Integrity and the Nigerian Stock Exchange in November 2014 with the plan that it would form the basis of a “premium board”, which would reflect higher governance standards and performance, in 2015. Access Bank, UBA Plc., Zenith International Bank, Diamond Bank, Mansard Insurance, Nahco Aviance, FBN Holdings and Oando Plc volunteered for the pilot scheme and achieved a rating of 70% or higher. The rating is composed of a self-assessment for corporate compliance (50%), stakeholder corporate integrity tests (20%), expert assessments (20%) and a Fiduciary Awareness Certification Test for directors (10%).

Nigerian Stock Exchange – Premium Board

The Nigeria Stock Exchange launched the Premium Board in August 2015. To be eligible for the Premium Board issuers need to meet certain market capitalisation requirements and score a minimum CGRS rating of 70%. The companies that qualified are Dangote Cement, Zenith International Bank and FBN Holdings.